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Newcrest flags US$270M impairment, US$600M free cash flow for FY'18

Newcrest Mining Ltd. expects to record a noncash, posttax reduction of US$260 million to US$270 million in the carrying values of certain assets as of June 30.

The company's free cash flow for the year ended June 30 is expected at about US$600 million, it said Aug. 9.

The reduction in carrying value includes about US$190 million at the Telfer gold mine in Western Australia, where the latest life-of-mine plan indicates lower levels of ore mined and higher levels of waste from West Dome, lower gold recoveries, higher estimated closure costs and higher operating costs than previously forecast.

Additionally, the carrying value of the Namosi copper mine in Fiji is expected to decrease by about US$70 million due to a review of the practice of carrying forward previous study costs.

Newcrest said the reviews may also impact the reported mineral resources and ore reserves for the mines. An assessment of annual mineral resource and reserves will be complete Dec. 31.

The company previously flagged other significant items totaling a net US$6 million gain after tax in 2018.

Production for the company in full fiscal 2018 totaled 2.35 million ounces of gold, hitting the upper end of its revised full-year guidance of between 2.25 Moz and 2.35 Moz, but down from 2.38 Moz it produced the previous year.

Newcrest intends to release its financial report for fiscal 2018 on Aug. 22.